Money Box Live/Phone In - Monday 19 February 2001

THIS TRANSCRIPT WAS TYPED FROM A RECORDING AND NOT COPIED FROM AN ORIGINAL SCRIPT. BECAUSE OF THE RISK OF MISHEARING AND THE DIFFICULTY IN SOME CASES OF IDENTIFYING INDIVIDUAL SPEAKERS THE BBC CANNOT VOUCH FOR ITS COMPLETE ACCURACY.

Tape Transcript by JANE TEMPLE

MONEY BOX LIVE

Presenter: Paul Lewis

Guests Julie Lord, Ian Millward

TRANSMISSION 19th FEB 2001 1500-1530 RADIO 4

ANNOUNCER Before all that though it's your call in MONEY BOX LIVE with Paul Lewis.

LEWIS Hello and today we answer your questions on individual savings accounts - ISAs - if you've opened a newspaper over the weekend you can't have missed the adverts - we counted nearly 100 in three of the Sundays alone, and the supplements on ISAs have been falling on to our feet for the last couple of weeks, but can we trust the advice in them, or should be beware the guides of March? This flurry of activity of course is preparing us for the end of the tax year on April 5th. If you haven't used up your ISA allowance you have just over 6 weeks to do so and then of course you'll be able to do it all over again on April 6th. In the first year of ISAs we invested more than 28 billion pounds, but many people are still confused - indeed what is an ISA? - how much can you invest in it? - what are you maxis and your minis? - how much can you keep in cash and can you spend it? - and even when you know the basics there are those difficult investment decisions as to where you should put your tax free savings.

Well whatever your question you can call Money Box Live now 08700 100 444 My panel of experts is poised to answer them - they are: Julie Lord, who's managing director of Cavendish Financial Management and herself a certified financial planner. Julie doesn't like the term financial advisor do you Julie? - and Ian Millward, the investment marketing manager from independent financial advisors Chase de Vere who produces probably the most thorough and independent guide to ISAs. Now lots of calls but before we come to the first one Julie, very quickly what is an ISA? How much can you invest in it?

LORD Well the general idea is that you can invest £7000 per person, per tax year into this thing called an individual savings account which will grow free of tax and also give you a tax free income if that's what you require. Now it's split into mini ISAs and maxi ISAs - you can invest £7000 each into a maxi ISA which is compromised largely of stocks and shares - or of course individual funds, but also you can break that down by investing £3,000 into a cash ISA, plus £3,000 into a stocks and shares ISA plus £1,000 into a life insurance ISA.

LEWIS And those are the mini ISAs - the three the three and the one, and they can be with all sorts of different people, but if you go for the maxi that's with one investment advisor and you have to do the whole thing through them?

LORD Yes

LEWIS One investment company I should say

LORD One investment company - that's right, although there is a little bit of confusion at the moment because of all these new fund supermarkets whereby you can still invest in one wrapper but you've got lots of different funds to choose from.

LEWIS well I think we might come on to those later in one of our questions, so let's go straight to our calls now. Kathryn is calling us from London. Kathryn, your question?

KATHRYN Hello - afternoon. I'm a freelance florist - 36 years of age with no pension or savings schemes of any sort, and just wondered whether you'd be able to give me advice as to an ISA that could be sort of a long term - is there a long term sort of saving?

LEWIS Well I think I'll put that to Julie again first cos this is all about financial planning - Kathryn, very typical of freelances - she's 36 - she's no long term savings plan - what should she be doing?

LORD Well I think Kathryn in the first instance you've got to decide what your long term financial goals are - there's no point in one worrying about what sort of financial products you're going to buy if you don't actually know what it is you're trying to achieve so first of all trying to establish when you want to retire and what sort of income you need when you do retire and then you can start to find out what sort of financial projects and arrangements you can make that will deliver that type of income of that amount of capital for you. So yes an ISA sounds like it might be a very good thing for you, but equally I believe you have no pension either, and I think all of these things in conjunction will help you to fulfill your financial goals - but I would encourage you to determine what they are first.

LEWIS Presumably Kathryn you are worried about - about your pension, about retiring in....20 or 30 years time?

KATHRYN Yeah definitely. And as far as you know doing it - but there is so much information about from you know various companies - that it does become a bit confusing as to...

LEWIS There is indeed. Ian Millward let me ask you , if somebody's got no savings, someone of that age - they're looking to the future, is an ISA really for them at all now or should it first of all go into a pension and then think about ISAs.?

MILLWARD I think that the two things go together but Kathryn certainly needs to be looking at a pension at her age and she needs to save as much as she possibly can into that, but she needs to complement it with her ISA because the two things go hand in hand.

LEWIS And of course if she's thinking of ISAs - stock market ISAs for the long term - you presumably would say are the best place for it?

MILLWARD As long as she's prepared to be thinking at least 5 years which it sounds like she is, then really she needs to think stocks and shares. Certainly if she's got no savings at all at the moment she needs to get that money working as hard as she can.

LEWIS Yes, so Kathryn I'm afraid you're going to be a bit poorer in the short term by putting a lot of money into your pension and possibly an ISA. Let's move on to the next call who's Ruby - also from London. Ruby, your question?

RUBY Oh right. Good afternoon. We - my husband and I have got some savings in a building society account and we've already got some ISAs ourselves, but we wondered whether it was possible for us to buy ISAs for our children who are 19 and 17 years old - and whether that's a good way of putting some money aside for them on a tax free basis?

LEWIS Well let me ask Julie again - is that possible?

LORD Well certainly for the 19 year old they could put money into an ISA because one of the rules that I didn't mention at the beginning was that people have to be 18 - certainly in this tax year to have an ISA.

LEWIS That's changing in April though isn't it?

LORD That's right, because in April I believe that cash ISAs will then become available to 16 and 17 year olds , so yes you can do this and of course it's - by putting money into ISAs and in fact giving gifts of capital to your children you can also be very effective for inheritance tax planning because you can be giving away your annual gift allowances and thus reducing the value of your estate for tax.

LEWIS So it is possible certainly for the 19 year old Ruby and for the 17 year old at least in terms of cash only is that Ian?

MILLWARD Well I was just gonna say - I mean it's certainly possible for the 19 year old, but if you've used your ISA allowance for this year it's very important that you're taking out in the child's name not your own otherwise you'll have two ISA subscriptions¿

RUBY Oh right

LEWIS Well like all investments for children they then can spend it if they choose to I think Ruby.

RUBY Yes of course. But you can do that - you can take out one for yourself and one for the them?

MILLWARD Well if they're over 18 - they're an adult and they have their own ISA allowance, so you can use your ISA allowance and they can use their ISA allowance - the fact that you may have gifted the money is really sort of beside the point.

LORD You can't do it in secret Ruby because the child - the child actually has to sign the application form and you - they have to give their national insurance number and so on.

LEWIS So it has to be actually taken out by the - the child but with money from Ruby?

LORD Effectively yes

LEWIS Okay Ruby - hope that answers your question. Let's move on now to Lionel who's also calling us from London:

LIONEL Hello

LEWIS Hello Lionel - your question?

LIONEL Hi yes - I've just had a TESSA mature with the Cheltenham & Gloucester - and I've temporarily put £11000 into Egg - but I want to do a TESSA only ISA saving for my son's further education when he leaves school in about five or six years, and I just wanted to know which was the best - it's very confusing how many there are?

LEWIS Indeed well just as we thought we'd got to grips with ISAs we now have to get to grips with TESSA only ISAs - or TOISAs ,¿.Ian will you be our TOISA boy on this one?

MILLWARD Yeah simply - simply as it can be anyway - TESSAs came out in l991 and they run for five years - so now we're at the point where the TESSA 2s are reaching their second anniversary so the government has called them TESSA only individual savings accounts - very confusing. All it means is the original £9,000 capital that you could have saved can now be put into a TOISA without affecting your actual ISA allowance, so basically the best way of thinking of it to keep it simple is a separate cash allowance that's tax free.

LIONEL Right - you're not allowed to give any - I mean there are so many of them aren't there that give reasonable rates - I mean I read the Observer every week...

LEWIS Well okay well we've sorted out the rules - largely obviously not for your benefit Lionel you understand the rules but a lot of people - a lot of people¿a lot of people don't and I think Julie has got some recommendations on TESSA only ISAs for you.

LIONEL Thank you

LORD Well Lionel it really does depend on whether or not you want to go for a fixed rate or a variable rate. One of the better ones that we've found on a variable rate is with Universal and they're paying 7.25% at the moment - fixed rate you can get a good deal with Sun Bank who are currently paying 6.25%. But I just - can I just make a point - when it comes to the re-investment of these things, you do actually have six months after the maturity of your TESSA in which to make the decision.

LIONEL Oh right

LORD So you don't have to rush into this - you know if you think that things are going to get better or you have an idea that they'll be a better rate along in a little while you don't have to rush into it and in addition although Ian referred to the fact that £9,000 could be invested that actually is the maximum because obviously if you only - if you only originally put £3,000 into your TESSA then you can only actually re-invest the £3,000.

LIONEL No I really - I see - £9,000- at the end? - I can't put £9,000 in immediately then?

LEWIS The important thing I think is that you can only put into a TESSA only ISA the capital you have put into the TESSA - all the interest it's earned doesn't count as part of that does it - that's...

LORD That's correct yes

LEWIS So the £9,000 is irrelevant unless you happen to have put £9,000 in - if you put £4,000 in and it's now worth £9,000 you can only put £4,000 into a TESSA only ISA. And can I just ask you Julie about that fixed rate - you said 6.25% - how long does that last for - do we know - that's over a period of time?

MILLWARD That - you nominate that one for between three and five years - so that would be you choice the rates the same for three, four, five years.

LEWIS Right - so you'd be taking a bit of a gamble on interest rates¿or you could get 7.25% but of course that is variable and that will go down if interest rates are cut as we expect?

LORD That's right - and I think the general anticipation is that interest rates will fall, so if you can get a good fixed rate then perhaps that's the better thing for you.

LEWIS And just to clarify absolutely - because people do find this confusing - I say people, I find this confusing - your TESSA only ISA allowance is quite separate from your main allowance and has nothing to do with tax years - it's all to do with when your TESSA matures?

LORD That's right, so if you have a couple who for example have got two maturing TESSAs that they put the full £9,000 into, then £18,000 between them can be re-invested into a TESSA ISA - in addition to the £7,000 each that can be invested into a maxi ISA.

LEWIS Right, and they can wait six months after that - they don't have to worry about April 5th for TESSA only ISAs - Ian?

MILLWARD Where you have to be careful - you can have this in addition to your mini or your maxi ISA, but if you do that you have effectively committed yourself to a mini or maxi ISA. Now it is confusing, there's no other way of saying it - but the simplest way to make sure that you don't get in a muddle over it is to do a TESSA only ISA, in which case all your other ISAs are completely separate.

LEWIS Right - okay. Oh well I think we should thank Gordon Brown at this point for introducing these wonderful rules.

LORD Nice simple rules.

LEWIS Keep us all in work anyway. Now we have a call from Raz who's ringing us from Brighton. Raz, your question:

RAZ Hello yes good afternoon. I've got a mini cash ISA that I've put about £350 in this year. And I'm coming into an endowment policy that is maturing next month which will give me about £8,300. Now I don't really know what to do with this - with this ISA and do you have any advice about where I should go from here?

LEWIS Ian let's start with you this time?

MILLWARD What sort of time scale are you looking at Raz - are you looking five years or do you just wanna home for the next 12 months for it?

RAZ I think three to five years possibly.

MILLWARD Okay can I ask how old you are?

RAZ I'm 35

MILLWARD I would suggest -I mean it really comes back to what Julie said right at the start about really thinking about what you're looking to achieve and what your objectives are and that's not always that easy to do because of course what we're looking to achieve changes all the time. You might wanna split this up into a couple of sums --it sounds like you've probably got most of your cash ISA allowance for this year still available to you so I would put £2,700 into that. And then next year you've got all your options open to you again, and if you're looking for flexibility it might well be that the mini route suits you the best, put some into cash and some into stocks and shares. That way if you need to get at your money in a hurry you've got the cash, but the money that you want to leave for three or five years is working a little bit harder for you in stocks and shares.

RAZ Right so you're suggesting say £2,700 this year and then another £3,000 in the cash ISA after the 6th April - and then put the rest in stocks and shares - yes - I mean in terms of the other thing is that I'm with an ethical bank - is there - but that bank doesn't do stocks and shares. Do you have any advice about ethical investment in stocks and shares?

LEWIS Julie you have an ethical ISA that you've been talking to me about earlier?

LORD Yes, well I particularly like the Jupiter ecology fund ISA. Now it is a bit tricky cos if you're with a particular bank then quite clearly you're not necessarily going to receive independent advice so you may well have to seek advice on this elsewhere, but the Jupiter ecology fund obviously is looking after the environment as opposed to some of the other funds that don't in particular. And I do like the look of that one, so I think what I would tend to do is do as Ian says and top up your mini ISA this year and by all means top up your mini cash ISA for next year. That still gives you about £2,000 by my reckoning - which you could obviously then put into a mini stocks and shares ISA using something like the Jupiter ecology fund or another ethical investment for that particular tax year.

RAZ Right, so I'm actually allowed to have a mini stocks and shares ISA as well as a mini cash ISA?

LORD Yes indeed you are.

RAZ Oh right I wasn't aware¿.

LORD £,3000 into each

LEWIS Yes and I mean just to clarify because Raz has put some money into a mini ISA - cash ISA she's limited to that - what she can do this year - next year she could put all £7,000 if she had into stocks and shares -as soon as she takes out some in cash then she's limited to what she can put into stocks and shares?

MILLWARD That's right -

LEWIS So it is a bit complicated, but I hope that's helped you with your decision Raz. I must say one of the nicer decisions isn't it - how to get rid of £8,300 that you're coming into - very nice. Now we have a question from Denis who wants to talk to us about charges I think - Denis from Plymouth hello?

DENIS Hello there. My question is in connection with the impact of charges on the income you get from an ISA. I invested £6,000 into a pep corporate bond when they were still in force with the M & G and subsequently I invested £7,000 into a maxi ISA with income in mind because I'm in my 80s and not concerned so much with capital growth. Recent valuations I've had from both investments show that the £6,000 is now down to something like £5,100 and the £7,000 is down to about £6,300. It seems to me it's a big consideration when you're seeking a monthly income as I was.

LEWIS And Denis are those charges - or is that just that investments are in funds that have fallen in value?

DENIS Well I think they're both I imagine, cos initially I think there's an initial charge in both cases and I think this is with M & G - I think they were possibly 5% I'm not sure.

LEWIS Let me ask Ian Millward about this - Ian these charges can take a big chunk out at the start - you've gotta have good returns to get that back haven't you?

MILLWARD They can - I mean I think in Denis' case it's actually more to do with the market. Corporate bonds have had quite a rough ride for the last couple of years and what you expect with a corporate bond fund is a relatively high and steady level of income but your capital is gonna fluctuate - it's gonna go up and down, which is the opposite that you'd had in the bank or building society where your capital stays the same and the interest goes up and down.

DENIS Seems to be more down than up

MI.LLWARD Well it has been. I mean you've been unfortunate over the two years. All I say is you know - you have to take a long term view - a sort of five year view with these things and also with the way interest rates look at the moment, it should suit corporate bonds, so hopefully the next 12 months should be a very good time to be in those sorts of investments.

LEWIS But for someone like Denis who's in his 80s as he says, if he's got a steady income stream, the fact the capital has gone down is perhaps not that significant Julie Lord?

LORD I think Denis you started of the conversation by saying that you did it primarily for income and I think you would probably agree with me that in fact you are getting exactly what you wanted and although we all agree that the capital has fluctuated in value and as you say downwards, it's still actually doing the job that you set it up to do, so I think that would be - that's fine and you should just sit tight and wait for the capital value to improve as well.

LEWIS Let's use this as a chance to talk about charges in general because it does concern people. Is it reasonable to have 5% of your money whipped away right at the start Ian?

MILLWARD I wouldn't say whether it's reasonable or not - I mean it's common. I mean charges are anything between 0 and 5% up front and anything between 1 and 1.5% on an annual basis. Typically these days if you want - cos obviously you want to get a good fund and not pay too much for it and typically you should be able to buy good funds for charges of probably not more than 3.5% up front.

LEWIS And you still pay something per year. Now what about cat funds cos some of these ISAs have this government cat mark charges access and terms it stands for -for reasons I've never quite understood. They are supposed though to control the charges Julie - do they work?

LORD Well yes. Ostensibly any fund that has a cat mark has got to comply to certain rules and regulations and that means they've got to limit their charges. Having said that, you've got to still come back to the question of what are you doing this investment for in the first place because predominantly people I'm sure most people would agree would rather pay higher charges and get a better performance on their money than pay lower charges and have a poor performance.

LEWIS That's never guaranteed though is it?

LORD No indeed but I think if you actually have a look around and see all the different funds available to you the majority of the really good performing ones are not in fact even cat marked.

MILLWARD I mean the vast majority of all funds aren't cat marked - it's probably something like 95 or 99% of funds that aren't and that's - that's where the cat is great in essence - it's there to protect people and let them know they're buying a sort of minimum value. But actually the charging structure for cats is so tight that the vast majority of funds don't meet it and therefore it's gone largely ignored.

LEWIS What is it?

MILLWARD On the stocks and shares element - it's to have a 1 - no more than a 1% annual charge - that includes the buying charge as well.

LEWIS And no up front charge - so it's just 1% a year?

MILLWARD And it's a minimum investment of £50 a month or £500¿

LEWIS And is it really true that people can't run funds at that kind of level - is that why none of them do it?

MILLWARD Well the only funds or the vast majority of funds that meet it are the tracker funds which are cheaper to run - but the vast majority of other funds don't seem to be met within those costs.

LEWIS Okay - let's move on- Anthony is calling us from Maidstone. Anthony your call?

ANTHONY Good afternoon. Yes - my query is regarding shares and putting them into an ISA. Could you explain in you know easy English how you can do this because cribs that you get in newspapers they never actually explain in easy steps how it's done.

LEWIS So may I ask you what your shares are in - what shares?

ANTHONY They're in a clearing bank

LEWIS In a bank - okay - so Anthony has shares in a bank - he wants to put them into an ISA - Julie in plain English please how does he do that?

LORD Well Anthony this is possibly a question that I get asked an awful lot because it's quite confusing. In the days - in the olden days of Peps where new issues could automatically be transferred into the personal equity plans people seem to think that ISAs work on similar rules and it's not the case. If you actually want to - for example if you have 100 Nat West shares and you want to put those 100 Nat West shares into an ISA -you actually physically have to get rid of them first, so you have to sell them and then you have to buy them back under the ISA wrapper.

LEWIS And how - you use that term under the ISA wrapper - how do you do that? - does it mean going to a financial advisor or a financial planner to do that - can you do it yourself?

LORD Well no you can't do it yourself - you do need to have an institution who provides - who presumably the Inland Revenue have given the authority to provide the ISA wrapper. Now in the case of a clearing bank I would be very surprised if that clearing bank did not offer its own wrapper that you could put its own shares into - so perhaps that would be the first place you might want to start. Certainly if they won't play ball then an ordinary stock broker will be able to help.

LEWIS Anthony does that clear that up?

ANTHONY That clears that up - can I just come on to that thing about charges - is there likely to be an up front charge or an annual charge on managing this wrapper?

LEWIS There shouldn't be really should there cos they're not doing anything?

LORD Well they're not managing it no - what you will find is that there is more than likely an administrative charge and then perhaps there might be something each year if they're going to deal with the dividends for you and that sort of thing, but it shouldn't be very much at all.

ANTHONY Thank you - thank you very much indeed.

LEWIS Remember those profits the bank made over the last quarter though - they've all got to make them somewhere haven't they - thank you for your call Anthony. Let's move on to Ann now who's a little bit worried about her investment - Ann?

ANN Hello - hello - I purchased some unit trust mini ISA for approximately £2,000 in July 1999. The purchasing price was approximately 112 pence and I noticed now and I've watched it carefully over the past three months that in fact they're only worth for selling purposes 99 p now - what should I do - cut and run, transfer - what ? - I don't know what to do.

LEWIS Well Ann I think we always say stock markets investment are for the long term and Ian is it a good idea to watch every day what your stocks are doing - or should you just leave them there and forget about them?

MILLWARD I mean what it suggests is perhaps stocks and shares ISAs aren't for you. You have to go in with a five year view in mind- that doesn't mean you forget about it for five years, but probably once a quarter to look and see how it's doing. And if every quarter it's always amongst the worst funds of its kind then perhaps it's time to look at a move., but the most important thing to bear in mind is that stock markets do go down and sometimes they go down for sustained period and it's all about being able to take a five year view which is likely to give you the best rewards.

LEWIS You do have to though don't you - I'm just looking at the FTSE 100 index which is actually up four on the day but it's still less than 6100 Julie Lord - it doesn't seem the best place to have your money at the moment or is it a buying opportunity?

LORD Well I think - personally I think it's a buying opportunity. And I'll perhaps come on to that a little bit later as well. Ann it seems to me that if your unit price has gone down from 112 pence to 99 pence you probably haven't done as badly as an awful lot of other investors in the market at the moment, and whilst that might not be what you want to hear, I think my view would be to hold fire. Can you tell us what fund you're invested in?

ANN Yes I'm invested in a UK growth fund accumulation.

LORD Well I think that in general terms I would hold on to it - if it's a good name - if it's a good fund manager - large company, good reputation then stick with it.

LEWIS And if Ann wanted to move could she do that without jeopardising her ISA allowance - you can move from one to the other and - without sort of losing another chunk of your allowance?

MILLWARD Yes it's simply known as an ISA transfer and what you would do is you you'd choose your new fund manager -you'd complete the application for them and at the same time you complete a transfer slip and that really gives them the authority to approach your existing manager, so as far as Ann is concerned it would be very straightforward but perhaps not the right thing to do though.

LEWIS And that applies to cash ISAs as well - you can move around within the ISA ?

MILLWARD Definitely for cash ISAs - yeah

LEWIS Okay - let's go on to Philip who's calling us about Peps and ISAs - Philip?

PHILIP Hello there

LORD Hello

PHILIP Yes I've got a couple of Peps and an ISA - and there'll still be there on my death - I was recently informed by a pal of mine that when I die the - whatever they're worth will be taxed. My wife will be taxed on - on them and my friend advises to get rid of his and he has done - what should I do do you think?

LEWIS Right the famous man in the pub has given advice here Julie -

LORD Shoot him

LEWIS Now what does happen on your death to your tax free investments in ISAs and indeed in Peps?

LORD Well certainly on death you can't transfer Peps or ISAs to anyone else so they would have to be sold and then they would form part of your estate.

LEWIS So they could be taxed at 40% - the capital could if they form part of your estate?

LORD Well let's hold fire - obviously if someone has an estate in excess of £234,000 then anything over that level will pay inheritance tax and so yes if those Peps and ISAs do form part of a larger estate then it could be that that is taxed.

LEWIS But of course selling them doesn't help because the money is still there?

LORD It's still in your estate exactly - and of course don't forget if you leave the money to your wife that then will not be taxable because of the inter spouse transfer rules which is tax free.

PHILIP I see. I see - well that helps

LEWIS Thanks for your call Philip - let's move on to Paul who's calling us from Southport - Paul:

PAUL Oh hello - there are many ISA supermarkets currently being advertised where you can pick and mix different funds under one ISA umbrella - however, they all seem to want lump sum investments and I wanted to know if there were any providers who would allow you to follow the same pick 'n mix philosophy but within a monthly savings plan?

LEWIS Julie - fund supermarkets and also discount brokers - these are two new 'ish ways of buying investments that are supposed to be cheap - how do they work - what can you do?

LORD Well the idea of a fund supermarket I think is really an excellent idea - the general idea as Paul says is that you put a lump sum forward but instead of having £7,000 that you invest in one fund you could if you wanted to invest say £1,000 in seven different funds so you're getting a very big diversity and that will help you to reduce your investment risk as well. Now to my knowledge I don't know of any fund supermarkets that will allow you to invest say £50 a month or something like that although of course we shouldn't forget that Scandia who actually pioneered this idea of the multi fund concept, I do believe they still offer the facility of investing on a regular basis into an ISA.

LEWIS And Ian Millward?

MILLWARD I mean the key thing with the fund supermarket is also that you don't pay an extra charge for getting more than one fund which is perhaps separate with Scandia. If you look at the Fidelity supermarket you can put your lump sum in this year but it will actually then phase it in over the next six months, so that's another way of actually dripping your money in at different times over the stock market.

LEWIS And where can you find out more about these?

MILLWARD The best thing to do is - weekend press you know - or go to an independent advisor or go direct to the fund supermarket - somebody like Fidelity.

LEWIS You mentioned the weekend press. We did talk briefly earlier about these guides that come out - fall out of the newspapers. Can we rely on those - or who's paying for all this paper?

MILLWARD I think you've gotta take a very skeptical eye. I mean independent financial advice is very much back in fashion, but of course it depends on the quality of the independent advice that you're getting and some of the guides that are coming out are very good and some of the ones that are coming out are really guides in name only and they're just an excuse to sell whatever product is flavour of the month.

LORD I'm very dubious about these Paul. Most of them are just a collection of application forms with a bit of editorial at the beginning and you get a choice of making these funds, and it - the guide if you like purports to recommend these particular things, but of course they're only just paid for by the providers.

LEWIS Yes and a very limited choice - I mean there's one here that was in the Sunday Times this - yesterday with only 8 funds listed to select from so.

LORD Well I've seen them with only three - yes and on the subject of discount brokers of course we - we do have to be very careful about this because really only people who know what they're doing ought to be going to discount brokers and just literally getting it as cheap as they can.

LEWIS Because you get no advice?

LORD Indeed

LEWIS You get what you pay for - it's cheap but you don't get advice. That's all we have time for. My thanks to Julie Lord from Cavendish Financial Management - and Ian Millward from Chase de Vere. More details of anything raised in the programme are with our Action line - 0800 044 044 Calls are free - 0800 044 044 Or indeed our website is also free - www.bbc.co.uk/moneybox. You can e-mail us on [e-mail]. I'm back at noon on Saturday with MONEY BOX live from the Home Buyer's show at Olympia and I'm back here at three o'clock next Monday afternoon.

ANNOUNCER That was Paul Lewis and the producer was Jennifer Clarke.

Further contacts

If you have any general queries about the tax rules for ISAs you can contact the Inland Revenue helpline which is open Monday to Friday 8:30am to 4:30pm Telephone: [phone]. The Revenue produces a free guide to ISAs which you can obtain by visiting their website (click top right).

The Asssociation of Unit Trust and Investment Funds (AUTIF) has a free fact sheet on ISAs. Telephone [phone]. Information Line 020 8207 1361 (24 hour service) or visit their website (top right).

How to find a Financial Advisor Remember you can check with the Financial Services Authority to see whether your adviser is authorised to conduct business. The FSA helpline is 0845 606 1234. The FSA also has a guide to financial advice which you can find on their website (click top right).

IFA Promotions will give you three local IFAS, call their hotline - 0117 971 1177. Or visit their website by clicking (top right). You can select by expertise, and by the method you want to remunerate the adviser (fees or commission).

The professional body the Institute of Financial Planning has a website where you can search for advisers. (Click top right). You can search by geographical area or by expertise. The financial planners you are referred to on the website are able to offer fee-based advice.

Another professional body, The Society of Financial Advisers, which is affiliated to the Chartered Insurance Institute, also has a website that allows you to seach for advisers (click top right). It allows you to find 25 financial advisers nearest you, and allows you to choose expertise, and fee or commission basis. The advisers you are referred to must at least hold the Advanced Financial Planning Certificate.

The Ethical Investment Research Service can give you names of IFAs who specialise in ethical investments. Phone [phone].